UK retailer Asda has reported a “robust” online performance “despite a challenging retail environment”.
Asda revealed that it had experienced a 2.2% decline in total revenues (excluding fuel) to £5.3 billion in Q2 2024, with like-for-like (LfL) sales down 5.3%. Despite this, Asda delivered total revenue growth of 2% in H1, with a 2.1% decline in LfL sales.
The retailer’s market share now sits at 12.7% for the previous month, down from the 14.8% that it held when the Issa brothers purchased the chain in 2021.
The supermarket said it “continued to deliver a strong online performance” in grocery in the quarter. It also increased online grocery sales by 1.4% in Q2, which accounted for 18% of its total food revenue – it said it had “continued to meet the needs of busy and value-focused internet shoppers”.
Asda said its decline in Q2 LfL sales comes amid an “unprecedented transformation” for the company, which it said was the “largest in its history”. The retailer said its executive team would have a “clear plan to deliver a more consistent experience for customers”, and stated that for the remainder of H2 and beyond, the business would be focused on three “key priorities”: customer satisfaction, enhanced product availability and a renewed trading plan.
“We continue to make progress by investing in bringing our quality and value offering to more customers across the UK, with Asda’s food price inflation trending lower than the market.”
Michael Gleeson, chief financial officer at Asda.
Mohsin Issa, Asda’s co-owner, said: “These results highlight a period of robust online performance… despite a challenging retail environment, online grocery increased by 1.4%, underscoring our steadfast commitment to delivering quality and value to our customers. Asda Rewards now accounts for 52% participation in all transactions.
“As we move forward, we remain committed to maintaining our value credentials, enhancing the product offer, and executing our long-term growth strategy to build an even stronger Asda for our customers and communities.”
Michael Gleeson, chief financial officer at Asda, said: “We continue to make progress by investing in bringing our quality and value offering to more customers across the UK, with Asda’s food price inflation trending lower than the market.
“We have made great progress over the last few years in transforming Asda into a diversified retail group, much of which is almost complete. However, we also know that there are some areas where we can and need to improve. We have today set out clear and decisive action to deliver a more consistent customer experience – to match the uncompromising value we offer. We remain confident in the underlying strength of the Asda business as we execute our long-term growth strategy.”
Asda chair says Mohsin Issa’s work “is largely complete”
This comes as Asda chair Lord Stuart Rose told The Telegraph that he was “embarrassed” by Asda’s performance.
Rose told The Telegraph: “I am going to be perfectly honest with you. I’ve been in this industry for a long time and I am slightly embarrassed.
“I don’t like being second, third or fourth. And if you look honestly now at the comparative numbers of Kantar or whatever index, we are not performing as well as should be. And I don’t like that.”
He expressed that he felt Mohsin Issa’s time running Asda was nearly up, stating: “We always said Mohsin was a particular horse for a particular course. He is a disrupter, an entrepreneur, he is an agitator.
“We’ve added a significant number of stores and we’ve changed a lot but it now needs a different animal. In the nicest possible way, Mohsin’s work is largely complete.”
